The past year has been rife with pitfalls in investment, and that’s not limited to the real estate market. 2020 has seen the global economy tumble down to its lowest in recent history, and it wasn’t hard to see why investing in a local real estate market was not the best idea out there. Having said that, this current year is seeing a marked improvement.
But while there is a steadfast boost towards the goal of herd immunity, the Coronavirus pandemic will be prevalent over our lives throughout the entire year. So in a sense, the pandemic that has ravaged much of the world is the foremost sign you should look out for when it comes to avoiding an investment in a local real estate market. Areas with a highly concentrated number of COVID19 cases should be avoided like the plague, quite literally so.
I am Ofir Bar, a startup technology and real estate investor who has been in the game long enough to have the right understanding of what a smart investment should be. I have been researching the ebb and flow of circumstances in the real estate market for over a decade. With this post, I would like to focus on the factors you need to consider when thinking of investing in a local real estate market. This field has one of the biggest risks versus reward swings that’ve ever been in a type of economy, so extreme caution is necessary.
The Reaching Effect of the Climate Conference
Just when you thought one natural or biological disaster is enough to put a halt to almost every economic field, climate change is clamoring to be heard once more. The United States being reinstated into the Paris accords affects the country’s nationwide real estate markets and the entire globe as a whole. The mere fact that climate change is making waves in the news once again can signal lingering differences in the market.
For one, green real estate would gradually be the hot commodity since said market is environmentally conscious and sustainable. On the other hand, if you’re looking into investing locally in industrial real estate such as factories, I suggest you hold on to the thought for now and let the dust settle first in the climate change debate.
The Rise of a New World Order
For better or worse, USA President Joe Biden’s ascension to the seat of power spells a stir for the real estate market in the country. The world’s largest superpower’s geopolitical shifts have a massive effect in the field, especially when it comes to the realm of foreign investors. President Biden is seemingly clearly intent on overturning everything his predecessor has laid down, with his primary focus being on re international relations.
I believe this means that a large market like real estate should be greatly reassessed. There is not a clear-cut path that President Biden has carved, but if you are thinking of investing in an area that could be considered undemocratic or rife with human rights violations, I suggest you think twice first.
Africa’s Lack of Order
Concerning the entry above, investors looking to dabble in the real estate market in Africa should also second guess their plans. While there are election systems rumored to be held in the continent this year, the jury’s still out regarding their outcomes. Simply put, Africa is seen to be a bit too non-democratic to hold stable investments in their real estate markets. Authoritarianism, corruption and systemic oppression are factors that unfasten the buckle of investment safety, as evidenced by the demographic index only having 6 out of 48 countries listed as democratic. There’s a fair bit of local instability in Africa’s real estate market, so I suggest you ward off of it for the time being.
So, why invest in real estate?
It’s no secret that investing in the real estate market is often daunting and intimidating. The COVID19 pandemic ever-present in our reality these days certainly doesn’t help the tumultuous field either. Still, I sincerely hope this article has helped you as a future investor to see what’s in store for the market at large. I, Ofir Bar, am aiming to shed a fraction of light in these trying times since uncertainty is at the forefront of the global stage.